America’s overall tax system is only barely progressive – meaning that the richest Americans pay only a bit more in taxes as a share of their income than everyone else. And at the very top, among those taking home hundreds of millions each year, the tax code is actually regressive, meaning the more they make the less they pay. The richest 1% own nearly 40% of all the wealth, but pay only 20% of all the taxes.
Over the next 10 years, the richest 1% of American households will take home about another $22tn, after federal taxes. Right now they pay about 30% of their income in taxes. Increasing their overall average tax rate by about 10 percentage points would generate roughly $3tn in revenue over the next 10 years, while still leaving the 1% with an average post-tax annual income of more than $1.4m. (That new tax rate, by the way, would be about the same as the overall rate the richest 1% paid back in the 1940s and 1950s.)
Three trillion dollars in new revenue is enough to make college free at all public universities, make a massive new investment in infrastructure along the lines of what Senate Democrats have proposed, and triple the budget for the National Institutes of Health.
Raise the top 1%’s effective tax rate by as much as 25 percentage points. Doing that would generate about $8tn in revenue, which is enough to send every household in the bottom 75% a check for nearly $8,500 every year for 10 years.
Whereas income is new money that comes in each year, wealth is the accumulated money that has built up over time. As of 2016, the wealthiest 1% of American households owned about $27tn in total, an average of about $23m per household.
A tax that took about 1% of that wealth each year would yield about $4tn over the next decade. To put that amount in perspective, $4tn is more than the federal government will spend over the next decade on foster care, school lunch, school breakfast, the Children’s Health Insurance Program, food stamps, unemployment compensation, supplemental security income for the elderly, blind people and those with disabilities, and all the tax credits for working families combined.
Income and wealth taxes at those levels would, of course, be a lot higher than we have now, but they wouldn’t be so high as to actually, directly, “abolish billionaires”. The rich would still be richer than everyone else, just slightly less so.
https://www.theguardian.com/us-news/2019/dec/13/billionaires-taxes-inequality-one-percent
Over the next 10 years, the richest 1% of American households will take home about another $22tn, after federal taxes. Right now they pay about 30% of their income in taxes. Increasing their overall average tax rate by about 10 percentage points would generate roughly $3tn in revenue over the next 10 years, while still leaving the 1% with an average post-tax annual income of more than $1.4m. (That new tax rate, by the way, would be about the same as the overall rate the richest 1% paid back in the 1940s and 1950s.)
Three trillion dollars in new revenue is enough to make college free at all public universities, make a massive new investment in infrastructure along the lines of what Senate Democrats have proposed, and triple the budget for the National Institutes of Health.
Raise the top 1%’s effective tax rate by as much as 25 percentage points. Doing that would generate about $8tn in revenue, which is enough to send every household in the bottom 75% a check for nearly $8,500 every year for 10 years.
Whereas income is new money that comes in each year, wealth is the accumulated money that has built up over time. As of 2016, the wealthiest 1% of American households owned about $27tn in total, an average of about $23m per household.
A tax that took about 1% of that wealth each year would yield about $4tn over the next decade. To put that amount in perspective, $4tn is more than the federal government will spend over the next decade on foster care, school lunch, school breakfast, the Children’s Health Insurance Program, food stamps, unemployment compensation, supplemental security income for the elderly, blind people and those with disabilities, and all the tax credits for working families combined.
Income and wealth taxes at those levels would, of course, be a lot higher than we have now, but they wouldn’t be so high as to actually, directly, “abolish billionaires”. The rich would still be richer than everyone else, just slightly less so.
https://www.theguardian.com/us-news/2019/dec/13/billionaires-taxes-inequality-one-percent
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